Saving for success, preparing for tomorrow

A recent study conducted by Standard Chartered delved into the savings habits and compared the saving goals and challenges faced by emerging affluent consumers in China, Taiwan, Hong Kong, Singapore, Korea, India, Pakistan and Kenya. It also examined the attitudes towards retirement planning and owning assets such as property.

This group of consumers have plenty of reasons to save: longer life expectancy coupled with rising cost of education, healthcare and property. Living longer also means that they need to have a tidy nest egg that can sustain their desired post-retirement lifestyle – factoring in the costs of travel, leisure and healthcare.

Here are some key figures* about saving, home ownership and retirement planning extrapolated from the study:

While 31% consider themselves close to reaching their key savings priority, 41% say they are far from achieving this.

Two-thirds (67%) save towards their top priority every month – rising to 70% in Hong Kong, 74% in Singapore, 76% in Korea and 79% in Kenya – while 17% in India do so every week.

Most markets depend on basic savings accounts as the most common method of saving; in China and Korea a time deposit is preferred (41% and 51% respectively, compared with a global average of 30%).

Low interest rates discourage them from saving more than they currently do. Almost a third (30%) surveyed cite low interest rates as a barrier to saving more; reflected most strongly in China (39%), Korea (38%), Taiwan (38%) and India (32%).

Surprisingly, millennials (aged 25-34) are likely to keep their savings at home (11%) than 45-55 year olds (9%).

The emerging affluent in Korea (25%), Hong Kong (24%), Taiwan (21%) and China (12%) consider buying a home as their #1 priority, with Singapore (15%), Kenya (15%) and India (11%) also citing it as an important goal.

Children’s education is the most popular savings priority among 35-44 year olds in the markets surveyed (21%) and for every age group in India and Pakistan; similarly for 35-44 year olds in Singapore (21%) Kenya (31%) and China (18%).

As priorities change with age, saving for retirement is top priority for 45-55 year olds in the markets surveyed and particularly in Hong Kong (34%), Taiwan (30%) Singapore (31%), Korea (27%) and China (20%).

Given how regularly the emerging affluent consumers save, adopting a more advanced approach such as taking calculated risks would likely reap greater rewards, whether in the short term or long term. Research in this study has also shown that this group of consumers can see better returns on their savings by an average of 42% over a 10-year period, if they switched from a basic savings approach to a low risk wealth management investment strategy.

When it comes to saving and planning for retirement, the key is to start as early as possible and equip yourself with the essential know-how. If you feel that you have fallen behind in achieving your goals, speak to our professional financial planners who will be glad to offer our advice and a comprehensive suite of saving and retirement solutions to cater for your needs.

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